iBrands Corp (OTCMKTS:IBRC) Is An M&A Machine

iBrands Corp (OTCMKTS:IBRC) is the latest holding company uncovered by the editorial team here at Insider Financial. This company seems to be acquiring interesting businesses. We found out that some of the merger announcements excited market participants, who pushed up the share price reacting to the news. In this article, you will find detailed information about this news. Before we justify the movements, have a look at the way traders celebrated some of the acquisitions:SourceBusinessAccording to the last quarterly report released on February 2017, IBRC "acquires and operates niche market brands having unique market positioning with the potential for substantial upside". IBRC functions like many other conglomerate companies, such as General Electric, or Berkshire Hathaway. The only difference is that IBRC is small and unknown, but it does not mean that the acquisitions engaged by the company are of bad quality.Let's see a little about the history of the company. It was founded in the state of Nevada on September 7, 1994. After large number of mergers, acquisitions, name changes and share purchase agreements, the company changed its name to iBrands Corporation on March 16, 2009. Additionally, on August 1, 2013, the business entity was relocated to Wyoming. To sum up, the company is a conglomerate business created from the agglomeration of several firms. Here is the list of the names of these firms.- Kenneth C. Garcia, Inc.: is merged with IBRC on January 22, 1998.- MAS Acquisition XIV Corp.: exchanged shares with the company on March 2, 2000.- Sterile-Pro, Inc.: it executed a merger on July 6, 2000.- Virtuoso Medspa, Inc.: this merger was acquired on June 1, 2006.- iMenu24/7 and I Software, Inc.: both were acquired on March 16, 2009.- Hatchbrands Ventures, Inc.: acquired on March 24, 2014.Recent DevelopmentsThe most remarkable developments of IBRC that made the stock price rebound were the following. On May 6 2016, the company entered into the cannabis business by launching the "PUREST" product line of whole plant extraction CBD products. In our opinion, this was a great move, as the company was able to profit from the legalization of the therapeutic marijuana in North America. The press release noted that the strategy of the company would be to offer high level of purity in its products, which would be delivered thanks to its unique extraction know-how:

"Purest CBD juice dropper"; "Purest CBD Spray"; "Purest CBD Honey" and best seller, "Purest CBD Cartridge Disposable Devise." iBrands Corp. (OTC PINK: IBRC) brand "PUREST CBD" has a competitive advantage to the Cannabainoid marketplace due to its formation from unique extraction technique and its optimum level of purity." Source

In our opinion, IBRC's managers were very clever this time. A holding company is able to enter into new markets when a new opportunity arrives. The fact that the company decided to enter the cannabis sector means that the management is ready to look for any opportunity to deliver returns to the shareholders. They are really benefiting from the flexibility offered by being a holding company. Additionally, we believe that market participants really appreciated the news as the stock volume increased in May.On July 20, 2016, the company announced the completion of its merger with Avita Beverage Company LLC, a provider of a Premium Natural Artesian Alkaline Water. Market participants did not react to this information as the merger was known in advance. However, this news is relevant as the company was able to finish all the regulatory work and added the company to the family.The story of Avita Beverage Company LLC did not end in July as another group was able to acquire IBRC's stake in the company some months later. If they were able to sell this business so fast, then they could negotiate really well and get a good deal. On September 28, 2016, China Bilingual Technology & Education Inc. (CBLY) acquired 51% stake that IBRC controlled in Avita Beverage. These are the terms of the agreement:

"The terms of the deal are 5,000,000 free trading common shares in China Bilingual (CBLY) for the 51% stake iBrands has in Avita. Based on the closing price of $.10 Sept 25, the monetary value is $500,000. China Bilingual already owns the other 49% of Avita Beverage Company Inc." Source

In addition, IBRC recently put out good news about its activities in the cannabis sector. On Feb 7, 2017, the company signed "Exclusive Supply Contract" with Free Spirit Organics LLC. As we mentioned earlier, the sector is growing very fast and the company was able to enter into the business as soon as the sector started to show growth. Ogburn, business executive of the company, said it this way:

"We are really focusing on growing our Purest CBD right now. The cannabinoid market is the future in our opinion and we are putting a lot of effort into it. The agreement is exclusive and was signed February 6, 2017. Source

Additionally, Chief Bill Bills from Free Spirit Organics LLC said:

"This is a very exciting time for our Tribes right now. The demand for our products is growing at 400% per month and we have been having a hard time securing the raw oil and having to go to several places to fill orders." Source

Furthermore, on March 23, 2016, the company put out information about a $13 million CBD order and the initiation of a join venture with a famous star with a large presence within the cannabis industry.Why is the share price so low?The company is putting out interesting news and traders seem to push up the shares every time they get to know something new. However, the share price is quite low. Thus, we made our own research to understand the situation. There are several reasons to explain why some investors are staying away from this company. Have a look at them.

• The company is disclosing its financial statements late: the 2016 annual report was not yet disclosed and the last quarter disclosed was the 3Q 2016. Savvy traders don't like companies disclosing late. Market participants tend to think: "no news means bad news"
• The company has disclosed a small amount of assets in its last report: the company's balance sheet shows large amount of liabilities, and very little total assets. That does not make any sense as the company is acquiring new businesses, thus the assets of the acquired companies should appear there. In our opinion, the next annual report should show the last companies bought.
• There is large amount of share outstanding: the total amount of shares outstanding is larger than 15 billion. The company needs to reduce this number in order to obtain new equity investments.

ConclusionIBRC is delivering interesting news about its new acquisitions. Some traders seem to be quite excited about them and are pushing up the the share price. However, the share price is still quite depressed and we researched the company's financial figures to figure out what is happening. In our opinion, the fact that the company is not putting out its financial statements on time does not help. Additionally, the company did not yet report the assets acquired recently, so maybe some traders are waiting for this to happen. Finally, we believe that the company has large amount of shares outstanding, which new traders may not appreciate it. To sum up, check out the company's news, but don't forget to assess the financial perspective of the company to get the full picture of IBRC. We see the company as having a lot of potential. If management can deliver on the financials, IBRC will be off and running in our opinion. We will be updating our subscribers as soon as we know more. For the latest updates on IBRC, sign up below!Disclosure: We have no position in IBRC and have not been compensated for this article.